Aadhaar is a 12 digit number that serves as a unique identifier for Indian citizens and residents. It was introduced by the UPA government in 2010, with the intentions of making subsidy and benefit deliverance more effective and eliminate leakages in the process. Aadhaar has been ever prevalent in the news ever since.

In February, various ministries of the federal government announced in February that for people to avail government benefits and subsidies, they would be required to hold an Aadhaar card (and Unique ID). The subsidies affected by these announcements include food grain and horticultural subsidies, crop insurance schemes and benefits offered under Federal government programs such as the National Rural Livelihood Mission and National Career Services. And on Thursday, the Lok Sabha also passed the Finance Bill of 2017, which makes holding and using one’s Aadhaar card mandatory for the filing of income tax returns as well as obtaining and keeping a PAN card.

The various issued notifications allow for a period of time until which beneficiaries can apply for the Aadhar card before not being allowed their subsidies and benefits. In the interim, in the absence of an Aadhar card, beneficiaries can use their application slip for an Aadhaar card or continue using other identification documents to avail their subsidies. The duration until which beneficiaries can wait before mandatorily requiring an Aadhar card differs from scheme to scheme. All of these notifications have been issued in accordance of the Aadhaar (Targeted Delivery of Financial and other Subsidies, benefits and services) Act of 2016.

The biggest impact will be on people who rely on food subsidies. To be more specific, any government benefits or subsidies related to food grains under the National Food Security Act of 2013 will now require the beneficiary to hold an Aadhaar card. An estimated 67% of India’s population relies on the food subsidies and benefits available for cereals due to the National Food Security Act of 2013.

One major point of contention over these decisions is that the passage of these ministry notifications contradict the Supreme Court’s ruling in 2015 on Aadhaar. The Supreme Court reaffirmed an earlier ruling from 2013, stating that Aadhaar can only be a voluntary decision of the individual and that as long as a person is eligible to avail benefits and subsidies, the government cannot deny them those benefits and subsidies because on the basis that they do not have an Aadhaar card. Despite this ruling, the federal government decided to push through with these moves.

Furthermore, the manner in which the Aadhaar Act was passed through the Parliament was contentious as well. The Aadhaar Bill would be introduced as a money bill in the Lok Sabha. Classifying it as a money bill meant that the Rajya Sabha would not be able to vote on it, merely make suggestions and that passage through the Lok Sabha itself would turn the bill into an Act. There was an outcry over classifying the bill as a money bill and the matter was taken to the Supreme Court, which is currently still holding hearings over the matter.

This is also not something new. The federal government has also previously pushed for the same moves numerous times after the Supreme Court ruling. For instance, making holding an Aadhaar card to avail the cooking gas subsidy being mandatory. Furthermore, the federal government has also been pushing bank accounts to be linked to Aadhaar cards, regardless of whether or not an individual takes government benefits or subsidies.

The main argument that the federal government, and indeed, the reason why the previous UPA government kickstarted the Aadhaar system, was to facilitate direct and transparent delivery of benefits and subsidies to the Indian citizens that required them. The system of payments making their way to people’s bank accounts directly was pursued with the goal of preventing fraud and corruption that otherwise took place and the World Bank too has praised the Aadhaar system for this reason.

According to The Economist, Nandan Nilekani, the creator of the Aadhaar system, argues that trust and verifiability are important for any business. Hence, the Aadhaar system’s positives will not only be limited to the government, but spread to the private business sector too as with an Aadhaar backed identity, banks will be more confident in giving out loans and businesses, both big and small more secure in knowing who they’re working with.

In fact, given the size of India’s population, something like the Aadhaar system might seem like easiest and most effective way to organize the payments of subsidies and benefits while keeping a check on administrative costs as well.

However, it is the sheer size of the Aadhar database wherein its issues lie as well. For starters, at least for now, the Aadhar system doesn’t have the strongest track records when it comes to the deliverance of subsidies and benefits. For instance, according to a report in the Economic and Political Weekly based on data made released by the Unique Identification Authority of India (UIDAI) itself, the probability of the identities of two different people matching was 1/112 for India’s 1.3 billion population. Furthermore, a survey conducted by Andhra Pradesh’s government itself saw 48% respondents citing Aadhaar issues as a reason for them missing out on subsidies and benefits. Yet, the government wants to force through Aadhaar cards for every Indian citizen.

The other issue with binding so much information of a citizen, including their bank accounts, to their Aadhaar card is if another country were to hack to Aadhaar database. India deals with frequent cyber attacks from China and Pakistan. Hacking the Aadhaar database would be an easy way for other countries to create disruption within India. Even Google and Apple have been wary about taking to Aadhaar due to security concerns.

Furthermore, there is the question of whether or not the government’s bureaucracy is equipped to handle something like the Aadhaar database and this is pertinent as the incapability to do so will only make it easier for hackers to target the Aadhaar system. Just recently, internet users reported how easy it was to access Aadhaar card information from government websites, by simply running a google search. Examples like that would suggest that the forcing through of Aadhaar indicates that the bureaucracy is not well equipped to handle the Aadhaar system currently.

This example also demonstrates the folly in the government making the Aadhaar system mandatory for a wide range of things, as in case of identity theft related to Aadhaar. A person reliant on Aadhaar for their benefits or subsidies, and, if permitted, having their bank account linked with the Aadhaar system, would be left toothless to carry out daily activities until the matter was sorted out.

There is the issue of the legal framework and privacy when it comes to Aadhaar cards. While there are safeguards in place in the Aadhaar Act itself, critics have argued that they do not go as far as they should to ensure the protection of privacy of citizens. More specifically, the fact that there is a lack of proper informed consent and wording of the Aadhaar Act allowing for the possible sharing of Aadhaar data with law enforcement are the two major worries expressed by critics.

While there are many positives that a system like the Aadhaar system will have for India, the limitations and flaws should also be kept in mind rather than a forced push for it. Aadhaar does make managing benefits easier for India but making it mandatory to avail benefit makes the Aadhaar database a prime target for exploitation, increasing the security risk behind it. Furthermore, forcing Aadhaar to be mandatory to file taxes opens up an argument on privacy rights. And the government’s argument of privacy not being fundamental does not help assuage any of them. Given the drawbacks, it is a must that there is more debate and discourse on the scope of Aadhaar as well as the development of proper training for relevant government workers before forcing through Aadhaar any more.

Nepal’s new Prime Minister Pushpa Kamal Dahal aka Prachanda paid his first foreign visit to India in the hope of improving the bilateral relationship that went through a rough patch recently. Prachanda’s state visit came amidst suspicions about his possible acquiescing to India’s demands that might draw Nepal further into India’s fold. In India, the Modi government put its faith in Prachanda to settle differences and move forward.

As expected, as a 25-point joint statement was released in New Delhi, Prachanda was lambasted in Nepal. While some went overboard in interpreting several points in the political communiqué in a negative vein, including his former fellow comrade Baburam Bhattarai, many seemed to agree that Prachanda made a serious mistake on a constitutional matter. The fact that Nepal’s internal matter –constitution writing— was included in the joint statement has reinforced India’s meddling into Nepal’s domestic affairs. Moreover, aside from the fanfare of state visit, there has not been concrete progress in areas that have long been Nepal’s concern—no measures on reducing trade deficit, no agreements on air space, etc.

Therefore, the visit seems to be a political marriage between Indian PM Modi and PM Prachanda. The latter, unlike in his first PM term when he was the leader of the biggest party CPN-Maoist in the constituent assembly-I, has now been reduced to the leader of a party that trails behind Nepali Congress and UML with a huge margin. Prachanda has been substantially weakened due to several splits in his party; even the party ideologue Baburam Bhattarai left him and formed his own party called “Naya Shakti”. Despite his ultimate aim of being in power, Puspa Kamal’s popularity has been hugely decreasing and, judging by the way he fared in the constituent assembly-II elections, it would not be an exaggeration to say that he is a politician with hardly any constituency. Moreover, his gesture to India has further tarnished his image in Nepal. He is also heavily criticized in his own party over several points of the communiqué.

Under these circumstances, regardless of what promises Prachanda made to woo India, the hope that he would be able to take everyone on board to solve a seemingly intractable Tarai-Madhes problem remains doubtful. The president of the Sanghiya Samajwadi Forum Upendra Yadav, a major Tarai-Madhes based party leader, worries about the fact that Prachanda’s pace to address their problem is already disappointing. Moreover, how long he will remain favorable to India by keeping China at bay in the face of domestic and Chinese pressure remains to be seen. After all, although he did visit India first, he could not do so without sending one of his Cabinet ministers to Beijing. In fact, he was the one who chose to get closer to China in his first term, although now he claims it was an immature decision.

Modi, for his part, was keen to reach out to Nepal before it becomes too late, and at the same time wanted to get across the messagethat India’s position on Nepal regarding the Tarai-Madhes issue has not changed (although some hints are emerging that it might); for these purposes he found Prachanda handy for now. However, although India has succeeded in its scheme, it must not overlook the fact that these political machinations have not helped improved India’s image among ordinary citizens in Nepal, rather the opposite. As a prominent public intellectual in Nepal puts it, “India continues to hit Nepalese exactly where it hurts.”

India’s regional security concerns with high stakes in Nepal are often manifested in heavy-handedness that end in a zero-sum game. Its concerns are reasonable, but India should try and address them not through heavy-handedness, but through bilateral and regional mechanisms. If India emphasizes “fraternal relationship” with Nepal, it should be able to show magnanimity and accept Nepal’s relationship with China and others. The close affinity between Indians and Nepalis, if managed well, is the asset for India to match China’s economic prowess.

One way Modi could manage this, as he prioritizes neighborhood policy, is by bringing dynamic Indians with 21st century world view for Nepal policy in New Delhi and in the Embassy of India in Kathmandu. He also needs to oversee bilateral matters through official diplomatic channels rather than through parallel, unauthorized tracks. India must convey its good will and its concerns to the Nepalese people openly, leaving no room for suspicions and for domestic groups to do politics by demonizing India or over-exploiting it, whether it is about Hindu religion, security concerns, water resources or Western powers’ presence. India should encourage more visits -- official and unofficial— between two countries at all levels in which Modi government has already done a remarkable job. At the same time, it must internalize that, given the truly unique relationship Nepal and India have, Nepalese (irrespective of their ethnic identities) cannot be anti-Indians and can never harm India’s interests.

On Friday, September 17th 2016, the Delhi High Court dismissed three publishing agencies’ suits against Rameshwari Photocopy Service at Delhi University. The University Press, the Cambridge University Press, and Taylor and Francis publishing company had sued Rameshwari over copyright infringement. They had accused the photocopy service of making and selling copies of books that they had originally published and for which they held copyrights. The Justice, Rajiv Sahai, dismissed their accusation, claiming that, “Copyright is not an inevitable, divine, or natural right that confers on authors the absolute ownership of its creations.”

Hudson Institute’s Modi: Two Years On report stated that the Narendra Modi administration has been attempting to make India a knowledge economy. Accomplishing this feat requires creating an environment where Intellectual Property (IP) rights are protected. The 2016 IP Rights policy’s aim was to make a “Creative India, Innovative India” in order to attract increased foreign investment. However, the protection of IP rights needs to be balanced with reasonable access to resources by individuals, and therein lies the problem of IPR policy.

Section 52 of the Copyright Act of 1957 details those acts that do not constitute an infringement of copyright. While the section does mention instances where reproduction of original content is allowed for educational purposes, there are strict limitations that are also included. For example, according to Section 52(1)(g) a “literary, dramatic, musical or artistic work” can only be reproduced as a compilation if it is “mainly composed of non-copyright matter, and does not contain “more than two such passages from works by the same author [and] are published by the same publisher during any period of five years”. Similarly, Section 52(1)(a) refers to private use and research and section 52(1)(o) specifically provides a limitation of three copies of a book for the use of a library only if it is unavailable for sale in India. Section 52(1)(p) also waives copyright infringement for reproduction of material for private study, however only as long as the original material is unpublished.

What stands out in this case is that the Copyright Act, while amended in 2012, remained the same during the November 2012 and the September 2016 court proceedings. However, the court produced verdicts that were polar opposites - first banning the photocopying and then later disregarding the importance of copyrights. The vagueness in India’s copyright laws, and intellectual property right policies are apparent in this reversal of tone. The affordability of textbooks and legitimate resources that allow “equitable access to knowledge” for students is part of an academic institution’s resource pool. As pointed out in a statement made by ASEAK, the infringement of copyright is a symptom of a larger issue, which is that DU’s system “is unable to meet simple demands of students studying in universities”. Authors and academics that utilize publishers such as the Cambridge University Press, Taylor and Francis publishing company, and the University Press, do so in order to be able to distribute their work while having their intellectual property protected. Allowing a photocopy store at a university to continue to make copies sets a precedent for future copyright disputes that may not be appreciated by international publishing agencies.

IPR policy and legislation are always a tricky balancing act to achieve because one has to weigh the rights of IP holders as well as the cost of accessibility. However, judgments such as this display a lack of consistency and ambiguity in India’s IPR laws. As India attempts to become a knowledge economy, the dialogue around protecting knowledge will require change so that it is on par with the one that is prevalent around the world.

In response to this attack, PM Narendra Modi called for a meeting at his official residence with military advisers and national security officials. In a series of tweets, Modi went on to say that "I assure the nation that those behind this despicable attack will not go unpunished." These comments were also echoed by India’s Home Minister Rajnath Singh who called Pakistan a “terrorist state”. He stated that he was “deeply disappointed with Pakistan’s continued and direct support to terrorism and terrorist groups.” Pakistan’s Senior Foreign Policy Adviser to PM Nawaz Sharif, Sartaj Aziz, responded that “Pakistan categorically rejects the baseless and irresponsible accusations being leveled” by Indian officials. Mohammad Nafees Zakaria, a spokesman for Pakistan’s Foreign Ministry, also firmly rejected allegations that Pakistan was involved in the attack on Uri.

Yet, an increase in harsh rhetoric and an escalation in hostilities is no longer sufficient. PM Modi is facing a backlash from his domestic base that are demanding a response against Pakistan. The PEW research center in a recent report stated that, “more than half of BJP supporters (54 per cent) and a plurality of Congress party adherents (45 per cent) disapprove of the prime minister’s handling of relations with Pakistan.” The report goes on to say that the majority of Indians favor a military response in the face of terrorism. If India was to respond militarily it runs the risk of escalating the conflict into full blown war with its nuclear-armed neighbor.

Additionally, it would be beneficial for India to provide proof of Pakistan’s involvement within the attack at Uri. It is still premature to implicate Pakistan but it would be in India’s best interests to lower its rhetoric and conduct a thorough investigation. This Wednesday, PM Nawaz Sharif is headed to the United Nations General Assembly and is expected to discuss the Kashmir issue. India could also use this opportunity to present evidence and the progress of its investigation that may implicate Pakistan. It could also complement this evidence with a clear and comprehensive policy that aims to bring a settlement with the people of Kashmir who continue to protest against Indian security forces. Delhi can no longer hope for this issue to remain domestic rather than international. It must face this facet of the issue head on.

India would also benefit from pursuing a policy of restraint within Kashmir. A recent CNN article has reported, “85 people have been killed in the past 72 days in clashes between protesters and security forces.” Through India’s growing economic significance, it has surpassed Pakistan and has signed strategic agreements with the United States. Myra Macdonald, commenting on the statements coming from the United States and United Kingdom, stated that “both countries realize there is very little hope of Pakistan giving up its support for militant groups... The US and the UK have seen so much double-dealing by Pakistan in Afghanistan that they are now far more sympathetic to the Indian position.” India must strengthen this position by continuing to remain on the moral high ground.

A security analyst in Islamabad, Amir Rana, commented to the Washington Post that “this single attack and this single day has tilted the balance in favor of India...earlier it was all talk about Indian human rights violations. Now it will be overshadowed by terrorism.” He went onto say that Sharif no longer has “the confidence he had before the attack. This has weakened Pakistan’s moral and diplomatic position.”

Furthermore, experts say that a conflict with Pakistan would deter investors and international business from India and cause trouble for India in both domestic and international markets. The political instability created within the markets would most likely damage the Indian economy and runs the possible risk of harming future economic progress. India would be better off spending its energy on further increasing its economic power. If Modi was to pursue a hawkish strategy he runs the risk of unraveling the progress his platform of economic growth has brought to India. It is not difficult to assume that war would not encourage continued foreign direct investment.

India needs to ignore the hawks in Delhi, focus on economic growth, pursue a policy of reconciliation rather than aggression against dissatisfied Kashmiris, and continue to pursue the status quo that has allowed India to become an ever-stronger global player.

Agriculture has not been a top priority for the Narendra Modi administration but nevertheless there have been some policies that have been proposed. The major one perhaps being a new crop insurance scheme, the Pradhan Mantri Fasal Bima Yojana (PMFBY), which offers farmers crop insurance at as low a rate as 1.5%. Apart from that however, there aren’t any major specific agricultural policies being pursued. Recently however, the central government made an announcement that can have strong implications. That announcement being of curbing states’ power while declaring bonuses above the centre-decided minimum support prices for wheat and rice. Before getting into the why, a brief overview of minimum support price would help us understand the reasons for this move better.

Overview of Minimum Support Price (MSP)

Minimum Support Price (MSP) is a form of price control used by the Indian government to regulate the prices of crops. By setting a guaranteed price for certain crops, the aim is to ensure that the Indian farmer remains secure in the face of potential low price fluctuations on their crops. This is important when it comes to India specifically, since the vast majority of Indian farmers are marginal or small farmers (around 85%c combined according to the 2010-11 Agricultural Census) , who are not able to grow multiple crops. The price of the crops they produce being low could easily jeopardize their financial security and the MSP aims to counter this threat. Furthermore, linked to the MSP is the procurement price that the central government agency, Food Corporation of India uses to procure crops for the public distribution system.

The minimum support price was introduced during the Green Revolution in the 1960’s. The inception of the agricultural prices commission, today known as Commission for Agricultural Costs & Practices, in 1965, was to help the government in determining their policy on crop prices and they currently determine the MSP for the government.

The need for a tool like the MSP emerged due to the developments during the Green Revolution. A lot of the technologies that were introduced were only affordable to own and maintain by rich farmers, who are few in number in India, even today. With the increase in production due to these new technologies, crop prices would reduce, ultimately harming the small farmer much more. A tool such as the MSP would hence aid not only smaller farmers who could otherwise be squeezed out of the market, while also acting as a safety net for farmers who could enterprise, to adopt new technologies.

Why Limit States’ Power Over MSP

MSP in theory has been sound. In fact, the central government isn’t about to drop MSP altogether. Only certain crops such as rice and wheat that have heavily been favored when it comes to MSPs and bonuses by state governments are being targeted. High MSPs and bonuses for these crops creates an incentive for farmers to increase production of those crops, which is fine but an increased focus and production of only these crops leads to problems in the environment, sustainability and even food and nutritional security to an extent.

For instance in Punjab, where despite there being a groundwater issue, MSPs for rice are higher compared to other crops. Or, how high MSPs have been found to play a role in the increase of food prices for the public, hindering India’s attempts at food and nutritional security. Furthermore, with increased production comes a higher price that the government must pay for those crops, which burdens the government with even more subsidies.

Potential Impact of the Decision

The impact would serve much more as a gateway to future policy changes rather than any immediate impact. Essentially, MSP inhabits a somewhat central role in the economics of Agriculture in India. After all, the MSP has major impacts on the market forces. It has been misused as a policy tool over the past, which have contributed to the problems of sustainability, food and nutritional security and subsidy burdens for the government. Politically also, the reduction of MSPs scope has not been prescient. For this reasons, reigning in states’ ability to play with MSP sends a strong signal for future possibly comprehensive policies being pursued by the government when it comes to agriculture.

India’s Railways and Union Government Budgets (hence forth the Budget) for 2016-17 should be assessed as part of a continuing process of transforming India rather than as a stand-alone event (albeit the most important event of the year).

Any budget is constrained by past policies and developments, and it will have impacts which transcend the fiscal year. Broader domestic and global developments, and perceptions and expectations of the stakeholders are also relevant in formulating a Budget.

The current external environment of subdued global growth and global trade, low or negative nominal interest rates, and a pervasive sense of fragility globally are factors which formed a part of the broader context in which the 2016-17 Budget was formulated. The domestic economic environment has also been challenging. There has been a continuing need to contain aftermath of imprudent fiscal policies of the previous government, two continuous years of drought, fiscal impact of the seventh Pay Commission for government employees, and fiscal challenges for the Union government arising from the acceptance of the recommendations of the 14th Finance Commission to devolve higher proportion of sharable tax revenue with the State governments.

Given the above, the trade-offs among different objectives such as fiscal consolidation, growth, sectoral priorities, giving impetus to “animal spirits”, and assigning proper roles to the state-market and public-private-social enterprise sectors were exceptionally difficult to manage in this Budget.

The Budget projects nominal GDP growth of 11 percent in 2016-17. Assessing the Budget involving implicit or explicit trade-offs, therefore requires nuanced judgments and understanding of how and over what period the government measures may translate into desired outcomes. The judgments of policymakers about political feasibility and readiness of the stakeholders to accept proposed initiatives are also relevant in the budget assessment.

As the Prime Minister Narendra Modi led government’s overall aim is to Transform India, the extent to which the 2016-17 Budget constitutes a positive step in transforming India is arguably a sound basis for its assessment.

Three aspects of the Transforming India aim are relevant for assessing the 2016-17 Budget.

 First, does the Budget meet growth diagnostics tests which are relevant for the Indian context?

 Second, does the Budget improve fairness by delivering public services and amenities to help improve quality of living (facilitating day to day activities through easier and wider accessibility and affordability), and quality of life (taking steps to address aspirations of the people for better quality of life)?

 Third, does the Budget help prepare India’s economy, polity, and society for progression from the lower-middle-income to upper-middle-income category of nation?

Assessed on the above three aspects, the Budget, on balance, does indeed advance the Transforming India objective and facilitate India’s progress towards moving up the income category. These are explained below.

Therefore, the Budget deserves to be welcomed by all stakeholders who desire India to emerge as an important power globally.

Growth Diagnostics Tests

The analogy here is with medicine where a few vital signs are examined to assess health. In growth diagnostics of fiscal health, these signs are: fiscal consolidation as an important element of fiscal and macroeconomic sustainability; investments, both direct, and those that crowd-in private and other investments as a result of public investments; use of knowledge, including when it is embodies in technology; encouraging formation of human skills and generation of livelihoods; and progressing towards cooperative federalism.

In all these aspects, it is essential that large imbalances between demand side and supply side forces should not be permitted to arise, but if they do, they are effectively addressed. In India, too often the demand-side forces have been increased significantly (in some cases through giving statutory power to certain rights), but supply side elements, whether in health, education, power, transport, and other areas have lagged considerably. This has led to significant distortions in the economy, and also in society, which the current government has been attempting to address. The fiscal consolidation and perception that public financial management of the country is sound are especially important in the current global environment.

The budget meets this objective fairly well. This is indicated by the reduction in fiscal deficit (3.5 percent as compared to 3.9 percent of GDP in 2015-16), revenue deficit (2-3 percent as compared to 2-5 percent), and total outstanding liabilities (47.1 percent as compared to 47.6 percent, and projected to decline to 44.4 percent in 2018-19).

These are to be achieved with projected constant tax revenue to GDP ratio of 10.8 percent; (with welcome provisions to reduce compliance costs and burden imposed on the rest of the economy in generating the revenue) and reasonable assumptions of 11 percent growth in nominal GDP (real plus inflation) for 2016-17; 12 percent in 2017-18, and 13 percent in 2018-19.The total government expenditure in 2016-17 is projected to be INR 19.8 trillion.

The budget continues to focus on obtaining fiscal revenue from not just the current year’s income, consumption, and production flows, but also from using state assets more productively. This is indicated by the plan to generate INR one Lakh crore from spectrum sales. The change in the name of Department of Disinvestment to Investment and Public Asset Management also reflects the new mind-set in generating revenue and improving the accountability of state assets.

The Union government is among the largest owner of assets, including land. They can also creat property rights (such as spectrum, air-space rights, airline landing allocation rights etc.) to generate revenue. But this requires a good asset registry and reforms in accounting methods, budget management systems, competency in auctioning in a transparent and accountable manner, and re-skilling of relevant staff. Initiatives by the government to track and reward performance of the officials and of office holders should therefore be welcomed.

The Budget has taken a welcome step to discontinue the practice of classifying expenditure in to Plan and Non-Plan expenditure from 2017-18. The States should be encouraged to follow this practice as well. This is a logical step as the earlier Planning Commission has been replaced by National Institution for Transforming India (NITI) Aayog. The word Transformation is particularly significant in NITI Aayog.

The Budget, particularly the Railway Component, has focused on obtaining better outcomes from budgetary outlays, widening the sources of revenue; using assets of the railways more productively (a neglected area so far); and more competent use of the Public-Private Partnerships (PPPs), including

Indian Railways partnering with the State governments to make railway assets more productive, and thereby crowding-in additional investments by other parties.

In the 2016-17 Budget, the Railways aim to achieve the operating ratio of 92 percent, as compared to 90 percent likely to actually be achieved in 2015-16. This ratio indicates how much Railways as an organization spend to earn a rupee. The lower the ratio, better the financial health exhibited by this indicator.

The increase reflects additional Pension expenditure arising from the Seventh Pay Commission recommendations. Various improvements through savings in real resources such as power utilization have helped in keeping in check the increase in this ratio. In subsequent years, the ration will need to improve further that Railway modernization plans can be better funded.

The Budget’s investment proposals are designed to improve productivity in the use of capital, and to crowd-in private investments from both domestic and global investors. The three schemes for monetizing gold (India’s households and institutions are estimated to hold 22,000 tons of gold, worth about USD 800 billion, equivalent to two-fifth of GDP) launched by the government could also generate resources to support investments.

The above suggests that merely focusing on the level of budgetary capital expenditure and increase (INR 2.18 trillion, growth of 4 percent), as some analysts have done, misses the main thrust of the Budget concerning investments.

As example of low better project and expenditure management can lead to higher output and better outcomes from similar outlays is from the road sector. Road Construction was 2 km per day under the previous Congress Government, and more than 450 projects were delayed or stalled under the current BJP-led government road construction is estimated to be 18 km per day (aim to increase it substantially), and all delayed or stalled projects have been restarted.

The decision to award 10,000 km of highway contracts in 2016-17; higher tripling of allocation to INR 270 billion, for Gram Sadak Yojna with potential for large multiplier effects; connectivity with the northeast, and investment in urban transport systems, with long-neglected in Mumbai receiving priority in capital expenditure of the Railways; and investments in coastal shipping, with huge savings in logistics and transport time and costs; investment in Digital Depository of academic transcripts; investments to provide urban-type facilities in rural areas under the Rurban clusters, are only some of the examples of the growth diagnostics- consistent design of investment proposals in the 2016-17 Budget.

The importance of other growth diagnostics signs is also evident from the Budget. Thus, Start-up India, Mudra (Micro Units Development and Refinance Agency) Bank, Digital India, and combination of Aadhar –Jan Dhan Yojna (involving opening of bank accounts, overdraft, and accident insurance coverage, under which 212.2 million accounts and INR 342 billion have been deposited by members); and use of mobile payment and other technology to directly transfer amount to the bank accounts of the beneficiaries; near tripling of issuing of E-tourist visas on arrival about 120,000 per month, all require significant and skill-mix process improvements, as well as the use of technology.

The cooperative Federalism initiatives of the Budget are exemplified by meeting the commitment to increase devolution to stakes by 55 percent as recommended by the 14th Finance Commission; involving States in recognizing centrally sponsored schemes; and the UDAY (Ujjwal Discom Assurance Yojna) scheme to revive power distribution companies in the States. The Real Estate (Regulation and Development) Bill passed on March 10, 2016 will also positively impact States.

The brief overview of the Budget concerning growth diagnostics strongly suggests the following.

 First, the Budget incorporates insights from modern growth theory and experiences by aiming to generate many growth nodes for the country, to help diversify the economy, and increase its resilience.

 Second, the proposals recognize that a combination of use of ideas and knowledge, process improvements, and reconfiguration of skill-mix (but with requisite certification for signaling) is essential for good quality broad-based growth. Seemingly small measures with disproportionately large positive impact on outcomes, one of the key characteristics of a sound budget, are evident in many proposals in the Budget.

 Third, it is encouraging India’s entrepreneurship and business instincts, facilitating it by better accessibility, affordability, and reliability of basic public amenities, particularly physical and digital connectivity.

Improving Fairness:

It is widely acknowledged that corruption at the higher levels of the Union Government that was previously ubiquitous during the Congress-led government’s tenure has been nearly eliminated, if not completely. As with inflation, corruption hurts the bottom–half of the population particularly hard. This factor has improved the fairness of fiscal operations and enhanced stock of social capital or trust significantly. This aspect has not been sufficiently acknowledged by the commentators.

The 2016-17 Budget also continues the focus of the current government to improve fairness by making basic public amenities more accessible, affordable, while improving their reliability. These in turn will positively impact on the quality of living of India’s households, facilitating their daily lives.

Illustrative examples from the Railway component of the budget include:

 Measures to improve cleanliness and hygiene facilities on stations and in trains

 Railways Research centers to continue to improve services.

An example from the Power sector includes the Dean Dayal Upadhyan Gram Jyoti Yojna (DDUGJY) under which 35 percent of 18, 452 currently un-electrified Villages have already been electrified. This in turn will not only improve quality of living, but also widen livelihood opportunities for the villagers, facilitating inclusive broader-based growth.

The transparent nature of this power initiative is exemplified by the continuous updating the progress in electrification of villages by visiting http://garv.gov.in/dashboard . The use of the dashboard as a technique, usually used by effective managers, reflects focus in outcomes of policy initiatives, rather than on government expenditure, which constitute only financial (not even physical) inputs.

The Pratyaksh Hanstantrit Labh (PAHAL) scheme under which subsidies for cooking gas are transferred directly to the beneficiaries, and the accompanying for citizens to voluntarily not avail of the subsidy (6.5 million citizens have already voluntarily given up the subsidy), whose savings are channeled to giving new gas connections for low income families, improves both fairness and growth prospects while reducing leakages, thus improving expenditure management. The use of cleaner energy sources would also potentially improve maternal and child health.

The response of 6.5 million citizens from many diverse groups to voluntarily give up the subsidy also suggests improvement in social capital and trust in India, a significant achievement of the current government.

The focus on outcomes enhances the fairness of the initiatives, a point missed by many analysts who only compare financial inputs, without understanding the processes by which such inputs are to be turned into outputs and then into outcomes focusing on improving household welfare.

The Budget also provides for meeting the pension benefits, including arrears, to the military personnel who, for the first time, were promised “One-Rank-One-Pension” by the current government. This is an issue of fairness as the earlier governments implemented such arrangements only for the civilian, but not for the military personnel.

The Budget and related measures also contain initiatives to address natural and other risks faced by households by specific risk-mitigation and management Programs. These include, the Pradhan Mantri Fasal Bima Yojna (PMFBY) to provide insurance cover and stabilize farm incomes in the event of natural calamities, pests, and diseases (http://pib.nic.in/newsite/PrintRelease.aspx?relid=134432), a dedicated long term irrigation fund, program to make ground-water resources more sustainable; reconfiguring MGNREGA (Mahatma Gandhi National rural employment guarantee act ) scheme to help generate such productive assets as ponds, wells, and compost pits to reduce farm risks and new health insurance scheme.

There are also initiatives to improve quality of life by meeting aspirations of the citizens to significantly improve their economic prospects and social position. Some of the initiatives such as Start-Up India, Mudra Bank have been mentioned.

The proposal to double farm incomes by 2022, an achievable goal, would potentially improve quality of living and of life. Empowering powers through greater economic freedom and access to technology will assist in this goal.

Perhaps bolder measures to reform education and research institutions, with much more accountability for outcomes, could have served this objective to even greater extent.

Preparing India to Progress towards Upper-Middle-Income Category:

The analysis under growth diagnostics and fairness above, attempting to channel energies of the stakeholders into nation building, and efforts being made to shift political accountability based on improving citizen’s quality of living and of life suggest that the Government is preparing the country towards challenges of moving up the income category, particularly by strategic use of knowledge and technology.

Three examples illustrate this point. First, the Indian railways which has entered into an agreement with globally competitive and commercially successful Indian Space Research Organisation (ISRO), another public sector Organisation, for effective use of space-based technology. This collaboration will facilitate better services to stakeholders of rail services, including enabling remote sensing and GIS (Graphic Information System) based applications.

The second example concerns the urgency shown in the Budget and in related initiatives to enhance road connectivity of India, particularly with its coastal areas, Northeastern region, and with the near neighbors. India has already concluded road connectivity agreement with Bangladesh, Bhutan, and Nepal, and at an advanced stage of negotiations with Myanmar and Thailand. A road journey from Delhi to Thailand augurs well for supporting India’s future connectivity an essential aspect of supporting much higher level of economic activities.

The third example concerns the 2016-17 Budget’s ambitions, but achievable goal of doubling farm incomes by 2022. The Budget doubles the allocation for agriculture, irrigations, and farmer’s welfare. As discussed the emphasis by the government on outcomes suggests the actual impact will be even greater.

Around 50 percent of labor force is currently engaged in agriculture and related activities, but agriculture accounts for less than one-fifth of India’s GDP. Accelerating the farm income could therefore facilitate India’s shift towards the upper-middle-income category. The roadmap for this goal involves use of knowledge, and technology, and investments for water conservation, for crop diversification, value added through processing, and through such activities as animal husbandry, and growing timber, and more household production, facilitated by better public amenities, such as power and road.

While this is rarely a linear process, the Budget initiatives do lay solid groundwork for better managing India’s future. The Budget demonstrates how improving efficiency in combining society’s resources in a context-specific manner can be simultaneously combined with improving fairness in several specific areas.

Some Measured Needed Greater Preparation:

There are some proposals in the budget for which better background work were needed. An example includes ill-considered method (but not the intent) of encouraging widening access to retirement income security by levying tax on EPF (Employee’s Provident Fund) accumulations.

The idiosyncrasies of pension economics are subtle, it has tyranny of small numbers where seemingly small changes can have disproportionate impact; and requires long-term policy stability and credibility. A systematic rather than a scheme-based ad-hoc approach to achieve the Budget’s intent is needed.

The Budget’s proposals to make tax treatment of National Pension System (NPS) less uneven as compared to the other retirement products however should be welcomed.

There is an urgency to develop international financial services in India. To achieve this, greater clarity on their tax and other regulatory aspects, and for such products as so-called “Masala Bonds”, INR denominated bonds listed abroad, in which exchange rate risk is borne by the lender not the Indian borrower, could have been forthcoming in the budget. Perhaps as with banking sector reforms, and bankruptcy law reform, these will be undertaken outside the Budget.

There is a need for greater urgency in passing the Constitutional Amendment Bill for GST (Goods and Services Tax). Insistence by the opposition Congress party that the rate of GST be made as part of the Bill should be rejected outright as inimical to the spirit of any tax Bill. The rate of GST should be set on the basis of such factors as what India’s competitors levy for their GST or its equivalent, and maximizing potential for ease of administration and compliance, and not on the basis of static revenue neutrality with respect to revenue generated by current distortive taxes on consumption, and which do not take into account positive dynamic effects of GST on the growth rate, which is a major factor contribution to any tax revenue generation.

The so-called “origin” states must be persuaded to drop their insistence on levying 1 percent additional GST rate on inter-state sales. Such sales should not attract any tax to realize full benefits from GST. States will not lose revenue as the Union government has agreed to reimburse to the States any shortfall in sales tax revenue for five years.

Concluding Remarks:

The 2016-17 Budget (and associated measures) must be viewed as a part of the process of transforming India towards meeting challenges of growth and competitiveness in a manner which eases the ordinary life of the citizens, and which encouraging aspirations and hope for better quality of life. Four distinguishing characteristics of the Budget are competence exhibited to effectively implement seemingly small measures that disproportionately and positively assist in India’s transformation process; harnessing knowledge and technology to improve society’s use of resources; expanding funding sources government’s balance sheet components, and outcome-oriented rather than just financial input-oriented, e.g. expenditure.

The tasks for the subsequent Budgets may include the following. Further expanding economic freedom in all sectors, including in education sector; increasing contestability and widening partnerships in policy design and implementation; initiating accounting, budgeting, and procurement reforms to better assess government’s performance; managing the implementation of the Goods and Services Tax (GST), once the Constitutional Amendment Bill pending in the Rajya Sabha is passed; refining Fiscal Responsibility and Budget Management (FRBM) framework, and undertaking reforms of income tax and its administration.

Article was originally published at Lee Kuan Yew School of Public Policy for their Working Paper Series.

The essential ideals of democracy are being debated upon in India. A national debate has been urged by students, writers, and the intelligentsia community that intolerance towards any dissent is being crushed while it should be allowed to flourish, questioned, and contested. India’s independence movement was based on the ideals of secularism, freedom of religion, freedom of expression and the freedom of thought. However, India is surging with protests across the country that are continuing to fight for those very fundamental rights.

On February 9, a group of students at Jawaharlal Nehru University (JNU) gathered to commemorate the 2013 hanging of Afzal Guru. Afzal Guru was convicted for his role in the attack on India’s parliament in 2001. The group of students was heard shouting “anti-national” slogans such as “We will fight until India’s destruction.” Members of another student group, the Akhil Bharatiya Vidyarthi Parishad (ABVP), at JNU protested in opposition to the “anti-national” slogans. ABVP, while an independent organisation, is known to be the students’ wing of the Rashtriya Swayamsevak Sangh (RSS), a Hindu extremist group. As Bharatiya Janata Party (BJP) was initiated as the political wing of RSS in 1951, ABVP is often affiliated with the BJP.

Kanhaiya Kumar, the leader of JNU Students’ Union was arrested on allegations of sedition after the protests on February 9th. At the time of his arrest it was not clear whether Kumar or the JNU Students’ Union was involved in the protest. However, he was arrested on grounds of complaints filed by BJP Member of Parliament Maheish Girri and ABVP. Many scholars including Former Attorney General, Soli Sorabjee, have come out since, to expose the lack of ground on which the arrest was made. Sorabjee went on to call the arrest on grounds of anti-national sentiments as “deplorable” as Kumar retains the right to free speech.

The situation escalated on February 15 outside the Patiala House Courts where Kanhaiya Kumar’s case was to be heard. BJP MLA, Om Prakash Sharma, openly attacked a member of the Communist Party of India, Ameeque Jamai who was their in protest to the arrest of Kumar. Sharma’s reaction seemed to have incited his supporters and around 40 lawyers in the crowd to attack members of the media and student protesters while the police half-heartedly attempted to protect them.

Sharma claims he was simply trying to stop a man from screaming “pro-Pakistan” slogans and not actually beating Jamai. However, pictures and videos of the scene clearly show otherwise. This kind of behavior does not behoove an elected member of parliament, especially one in the largest democracy in the world. Mr. Sorabjee also mentioned that “no individual can become a law enforcer” referring to the MLA leader. Sorabjee’s words could easily be referring to the lawyers beating up JNU students. The lawyers had actually communicated the day before the incident to gather in front of the court and “peacefully” teach the protesters what it “takes to be a patriot.” The controversy has since raised questions around “patriotism” and “constitutional rights.”

After the arrest, security agencies revealed to the Home Ministry that Kanhaiya Kumar might not have raised any anti-national slogans and that the sedition charge could be “over enthusiasm” on the part of police officers present at the scene. In fact the speech that he was arrested for condemned violence, and rallied “to strengthen democracy.” In his speech Kanhaiya Kumar said:

"We have full faith in our country’s Constitution. And we want to firmly assert that if anyone lifts a finger against this country’s Constitution — whether the Sanghis or anyone else — we won’t tolerate it..."Then why are they (ABVP and RSS) so uncomfortable? They have a problem when the people of this country talk about democracy.”

This incident is similar to the recent Hyderabad Central University incident where a PhD student, Rohith Vemula, committed suicide. His suicide seems to have stemmed from a disciplinary action by the university and expulsion from hostel against 5 students including Vemula. Letters from Union Minister Badera Dattreya and Smriti Irani seem to have influenced the decision for expulsion.

The disciplinary action was taken due to his involvement in protests by the Ambedkar Students Association (ASA) in August of 2015 in which the student group protested against the ABVP chapter’s actions to disrupt the screening of the documentary “Muzaffarnagar Baaqi Hai.” It was based on the 2013 anti-Muslim massacre in Western Uttar Pradesh. It is believed that his suicide is in protest of the way Dalits are being treated in India.

Vemula’s letter to the University vice-chancellor, his suicide letter and the protests that followed brought to light that casteism in India was still a reality overlooked and often dismissed by many. He had asked the chancellor to make “ropes available to rooms of all Dalit students” and “to give poison to them at admission” instead of the humiliation that Dalits faced in the community. In his suicide letter he wrote:

“The value of a man was reduced to his immediate identity and nearest possibility. To a vote. To a number. To a thing.”

His words expose how his identity was reduced to a single thing, being a Dalit, and not that he wanted to be like Carl Sagan and explore nature. These incidents have just added more questions to the debate: of “lack of pluralism,” “nationalism” and “treatment of minorities.”

In both cases chapters of ABVP, a BJP affiliated student group, opposed the rights of other student groups to voice their opinions, to gather and to demonstrate peacefully. These are rights protected by the Indian constitution and are crucial to the functioning of a democracy so large and diverse.

Additionally, in both incidents local members of the BJP party supported the ABVP in its protests. These incidents showcase right-wing Hindutva elements within the BJP and student groups allied to it that have often tried to silence opinions that differ from their own. Their tactics aim to ambush and stifle opposing views that include farcical police cases, private complaints, social intimidation and legal petitions.

This is evidenced in the case of the arrest of GN Saibaba, Professor at Delhi University, who was arrested due to alleged maoists links. In support of Mr. G.N. Saibaba, Ms. Arundhati Roy, a renowned author and activists, faced criminal charges for writing an article in Outlook Magazine that interfered with the administration of justice. Many including former Chairman of the Press Council of India, Markandey Katju, failed to “see how it (Roy’s Article) could be regarded as contempt of court in a democratic country.” The intolerance towards dissent or freedom of expression are not just through formal criminal charges like in the case of Ms. Roy but also through an intolerant rhetoric by elected representatives.

Several members of BJP reacted with hostile comments towards actor Aamir Khan when he spoke out against rising intolerance in India at Ramnath Goenka Excellence in Journalism Awards ceremony. BJP MP Yogi Adityanath declared that "If Aamir Khan wants to leave the country he can go. The population of the country will come down." Mukhtar Abbas Naqvi, Vice President of BJP and Minister of State Parliamentary Affair disregarded Khan’s opinion by saying, "neither is he going anywhere nor will we let him go." Naqvi continued to dismiss Khan’s comments by assuming that Khan was “under someone else’s influence.” These comments were followed by Khan being berated on Twitter. Some claimed his comments were spreading communal behavior and fear in India. It is not the first time that a public figure has been shut down for speaking out.

A leading Indian thinker and president of Center for Policy Research in New Delhi, Pratap Bhanu Mehta has been very vocal about his discontent with the current government being the primary institution responsible for “threatening democracy.” Mehta argues that in the case of the arrest of Kanhaiya Kumar, essentially on the terms of being anti-national, is a trend by the state to create an atmosphere of “patriotism” that requires no tolerance to any dissenting thought.

Mehta is not just criticising the role of the state in the arrest of Kanhaiya Kumar in violating the law of sedition, but, also the use of power by the state “to crush thinking.” He called it “malign” and “politically stupid.”

Mehta is not alone in calling out the government in this case or previous ones. Soli Sorabjee, in an article in the Hindu, wrote that the “right to dissent and tolerance of dissent are sine qua non of a liberal democratic society,” a couple of years ago and has been steadfast in that belief with these current incidents. Mr. Mehta differs slightly in his analysis that there is no room for speculation in this case as there was no “immediate instigation to violence” that is part of the IPC 124A referred to as the law of sedition. The real threat to democracy is the government’s suppression of free speech and to gather peacefully.

The “immediate instigation to violence” is actually coming from the opposition to the JNU students protest. A video taken by Jagat Sohail, student at Delhi School of Economics, shows a group of students chanting threat of murder to students of JNU who gathered on the anniversary of the hanging of Afzal Guru. The Indian government under the leadership of Mr. Modi has tried to promote economic optimism, growth and development as its primary agenda, however, in the past two years the national debate has reverted back to social issues of freedom of expression, freedom of religion and some have said even the “freedom of thought” is under siege.

Elements within the RSS, VHP, ABVP allied with the BJP have been at the front and center of what Sorabjee terms as “the menace of intolerance.” A poll taken by Times of India revealed that 62 per cent of the country believes that the “Sangh Parivar hotheads are adversely affecting the development agenda.” This intolerance may prove to be quite abrasive to the movement towards economic growth for India that Modi intends to be the champion of.

The national debate surrounding the recent JNU and Hyderabad University incidents are around the intolerance towards dissent and what it means to be Indian. Kanhaiya Kumar urges in his speech that the Sangh Parivar and groups like ABVP should not be the ones to justify patriotism or certify nationalism in India. He spoke up against “institutional violence” and appealed for the preservation of “constitutional rights” for the citizens of India. This surge of debate around these concepts are not new in the national arena and definitely not new since Narendra Modi took office.

There has been a constant battle between secularists and the government, from the beef ban to the “Award Wapsi” by the intelligentsia in India. This has now reached the doorstep of educational institutions where debate is not only necessary, it should be encouraged even if it is to debate the “hanging of Afzal Guru.” Being the world’s largest democracy and having had a national movement not 70 years ago must live up to the ideals of secularism, pluralism and inclusivity on which it was built upon.

Therefore, it is the responsibility of the Modi government to challenge fringe, extremist elements in society in order to uphold the rights of its citizens to dissent that will only strengthen democracy, not weaken it.

In the current fragile and uncertain trade and macroeconomic environment, the urgency for SAARC (South Asian Association of Regional Cooperation) to enhance trade and broader economic integration has intensified. Established in 1985, SAARC comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

Estimates by UNCTACD (United Nations Conference on Trade and Development) suggest that intra-SAARC merchandise trade share in total SAARC trade was 5.8 per cent in 2013. This share will still remain low even if cross-border unaccounted trade, most of which is with India given the geography, is included. In contrast, intra ASEAN (Association of Southeast Asian Nations) trade among its ten members was 24.2 per cent in 2014.

In some areas however, there is considerable cross-border integration, especially between India, Bangladesh, Nepal and Bhutan. Data from the World Bank’s Migration and Remittance Fact book 2016, ranked India as among the leading migrant destination in SAARC, with a stock of 5.3 million in 2013.

The India-Bangladesh migration corridor ranked as the third largest corridor in 2013 accounting for a stock of 3.2 million persons. While not officially documented, the number of people from Nepal working in India is variously estimated at between 2 and 3 million people, a fact often unappreciated and unacknowledged, even by the researchers. India also provides access to citizens of Bhutan in education and employment opportunities. There is also not insignificant movement of people between India and Sri Lanka

As India’s regional and global integration becomes deeper and broader, creating data gathering and analysis capacity to document and analyse the details of foreigners working and living in India merits urgent consideration.

Substantial intra-SAARC manpower flows constitute additional rationale for SAARC member countries desiring to take advantage of deeper regional inter-linkages to improve growth and resilience to be sensitive to India’s core geo-economic and geo-strategic interests.

The same World Bank source estimates ranks India-Bangladesh as among the top remittance corridors globally, accounting for official flows of USD 4.2 billion in 2015. Remittances through unofficial channels are likely to increase this figure. Much of India’s external aid is directed to SAARC countries, particularly to Nepal, and Bhutan.

By Government of India estimates, SAARC countries accounted for 6.5 per cent of India’s total merchandise trade in 2014-15.

The services trade data are not available on a disaggregated country basis, a gap which the Indian authorities should urgently address. In 2014, India’s exports of services was USD 154 Billion in 2014 (nearly half of the value of Merchandise exports), while its import of services was USD 124 billion, (26.9 percent of its merchandise imports). These are substantial values requiring better disaggregated and timely data collection and reporting.

Broadly, there are at least five major areas of services where India needs to enhance its focus and capacity for regional and global trade. These are tourism, transportation, including port and air transport, financial services, health care, and education services. Cyber security services are another potential services area which India could develop global competitiveness given its talent pool in the IT sector, and with more than one billion mobile phones, suggesting that 80 percent of the population is connected.

Organization of Indian Education Fair in Bangkok, Thailand on January 30 and 31, 2016 involving over 70 institutions from India is a step in the right direction. More outcome-oriented initiatives to expand India’s economic linkages with near neighbours are however needed.

In 2014,SAARC countries accounted for 9.0 percent of Global GDP in PPP (purchasing Power parity) terms; only 2.8 per cent of total global trade in goods and services ; but for 23.8 per cent global population. This suggests that SAARC members have insufficiently focused on developing their capacities to use regional and global interlinkages for growth and development, an omission which they need to urgently address.

Till recently, SAARC countries have been growing at multiple speeds in different sectors, and often with an inadequate appreciation of the role that trade and economic integration with neighbouring countries can play in generating sustained growth and ameliorate regional conflicts. An example of this is unwillingness of Pakistan to normalize trade and economic relations with India, and its refusal (as of January 2016) to grant India even the elementary MFN (Most Favoured Nation) treatment. This has in turn contributed to limited progress in SAARC inter-linkages in general, and to India’s deeper integration with SAARC, and through SAARC with some of the ASEAN (Association of Southeast Asian Nations) countries, particularly Myanmar and Thailand.

To help willing SAARC countries to move from their current lower-middle income country group to upper-middle income group in the current global environment, SAARC Minus-X approach, relatively successfully adopted by ASEAN to get around lack of consensus on some integration issues in their region, holds promise for India. In essence, SAARC members should first focus on areas where mutual cooperation is beneficial, and not permit issues of politics or ideological disagreements, i.e. the “X”, to impede progress by willing members in other areas.

The Indian government’s recent efforts of systematically and competently taking initiatives in this direction have been commendable, as evidenced by the examples discussed below. In some cases, initiatives of the previous government have been refined and more energetically applied, thus providing continuity to India’s economic diplomacy.

Enhancing Connectivity and Reducing Transaction Costs

Various initiatives to improve physical and digital connectivity undertaken by the government have opened up new avenues for growth and competitiveness for India’s Northeast Region. For the first time, two broad gauge trains to Murgongselek in Assam, and to Bhalukpong in Arunachal Pradesh became operational in August 20-15. There are plans to connect all eight North East States through Railways by 2020.

A direct bus line has opened between India’s Tripura State which is land-locked and Bangladesh; and a direct rail link between Agartala in Tripura state to Akhaura in Bangladesh.

Improved road and rail connectivity could encourage new growth nodes for the states in the Region, help in better managing illegal cross-border trade, and improving fiscal revenues. These measures should not only continue but intensified with willing partners from SAARC and others such as Myanmar and China.

Following Bangladesh’s push towards sub-regional cooperation, the Motor Vehicles Agreement was conceptualized 2013 and inked on June 15, 2015. Bangladesh, Bhutan, India, and Nepal (BBIN) have agreed to further facilitate cargo traffic and movement of personnel to Thimpu, Bhutan. The agreement will ease cross-border flow of goods and people, improving regional trade by creating economic and transport corridors. The agreement is also expected to have a positive impact on tourism within the region.

Following this, India and Nepal also amended their bilateral Treaty of Transit on June 22, 2015 allowing the movement of vehicles imported from a third country into Nepal through four border points. In January 2016, Nepal has reportedly sought India’s support to activate the shortest trade route with Bangladesh.

Following the BBIN agreement, India will also be signing a similar agreement with Myanmar and Thailand to improve connectivity within the region. The ministry will also embark on constructing one lakh km roads in the next five years in the eight northeastern states bordering China, Bangladesh, Myanmar, Nepal and Bhutan.

Three SAARC countries do not require visa to enter India. They are Bhutan, Nepal, and Maldives. Sri Lanka nationals could avail of visa-on Arrival facilities.

In addition to SAARC minus X agreements, SAARC counties have also focused on bilateral agreements within the region. In 2015, India and Bangladesh focused on improving regional connectivity and trade enhancement. India and Bangladesh recently renewed their bilateral trade agreement, in which India allowed used of its waterways, signed a coastal shipping agreement, and MoUs use of Bangladesh ports. Apart for maritime cooperation, the two countries also signed agreements to improve transportation between West Bengal and Dhaka. The two countries have ratified the Land Boundary Agreement, settling disputed borders, a major confidence building accomplishment, setting the stage for greater mutually beneficial economic-interlinkages.

Energy and Technology Cooperation

The Indian Space Research Organization is also close to launching a “SAARC Satellite” in December 2016. The satellite will have 12 KU band transponders and is expected to provide assistance to SAARC countries in tele-medicine, tele-education, village resource centers, crop productivity and disaster management. This is specifically of need to countries like Bhutan, currently in need of such resources.

In 2014, India-Bhutan signed a hydropower agreement, which has been the focal point of India-Bhutan’s trade. However economic cooperation set to grow in areas such as tourism and agro-processing and trade with Bhutan is expected to double over the next five years. In October 2014, India and Nepal entered into “Electric Power Trade, Cross–Border Transmission Interconnection and Grid Connectivity” agreement. This will facilitate trade in power between the two countries. India has plans to export 100 MW of power from the State of Tripura to Bangladesh by early 2016, improving energy security for both countries.

Regional Trade Cooperation

In 2015, India and Sri Lanka signed visa and customs agreements, among others, focusing on trade improvement through reduction of non-tariff barriers. The two countries have also agreed to focus on maritime and energy cooperation. Similar to the BBIN agreement, India and Afghanistan are also expected sign an agreement to improve connectivity. India is finalizing a transit agreement to allow Indian goods to enter Iran through Chabahar port on the country’s southeastern coast bordering Afghanistan. This will enhance the economic and strategic space for all the three countries involved, particularly as sanctions on Iran have now been lifted.

This suggests that India has an opportunity to engage its willing “near neighbors”, in SAARC, ASEAN, and West Asia to form cooperation alliances in specific areas. These could include agriculture and fisheries for food security, technology-based health care; conventional and non-conventional energy; tourism, education services, logistics and supply chain infrastructure; and defense related goods and services.

The key desired outcome is to extend India’s economic and strategic space, while constructing mutually beneficial agreements, enhancing collective resilience of the group of willing near-neighbors.

The 71st UNESCAP Commission session held in Bangkok, Thailand earlier in 2015, was attended and addressed by India’s Minister of Commerce and Industry, Mrs. Nirmala Sitharaman. She boldly declared, in order to close the crucial gaps in infrastructure, that India would require an approximate US$ 1 Trillion. India would need that massive investment in “the next few years” and would require “innovative solutions,” she continued. Fast-forwarding to January 2016, India was elected to a seat on the Board of Directors of the China-led Asian Infrastructure Investment Bank (AIIB). The bank is constructed with the mission to “jointly address the daunting infrastructure needs in Asia.” India, part of this venture as the second largest shareholder, committing around US$ 8 Billion is not merely a convenient coincidence but a concerted effort to become a significant player in the shifting world order.

Just by its mere membership and the difficult-to-overlook massive contribution, India is now inextricably at a point of advantage in accomplishing three goals. One, building its own infrastructure being the most obvious. Two, shifting to a more global role in a more tangible way, that is part of a continued active foreign policy of the Indian PM, Mr. Narendra Modi. Lastly, AIIB is the common ground on which India can carefully sustain and build on its recent improvement in relations with China.

According to the World Economic Forum’s Global Competitiveness Index, India’s infrastructure score has actually worsened over the last year. From the 2014-15 report, India now ranks 87th out of 144 countries. Indian Finance Minister, Mr. Arun Jaitley, has also mentioned the government’s push for a 9% growth in 2016. However, even to sustain the current 7.3% GDP growth, India needs to quickly and efficiently invest in and develop its infrastructure. Bloomberg reported that India will have to finance infrastructure projects based on loans. While it is attempting to approve major projects (roads, ports, power etc), expecting further interest rate cuts, and establishing “a fund to spur infrastructure lending and permitting dedicated tax-free bonds,” India’s expected debt is to reach $750 billion by 2017. Hence, India’s $ 8 Billion contribution will become the quid pro quo of a promise of increased investment for its own domestic growth agenda.

“developing Asian countries have an infrastructure demand of about $8 trillion over the ten years to 2020, including $2.5 trillion for roads and railroads, $4.1 trillion for power plants and transmission, and $1.1 trillion for telecommunications, and $0.4 trillion for water and sanitation investments.”

India is ready to lend its support to close that gap within the region and in turn is actualizing its leadership in Asian affairs. Becoming a key player in AIIB incontrovertibly places India in a position of strength and by pairing up with China, it is leading the shift of the economic order of the 21st century to Asia. AIIB, with $100 Billion in seed money, is in direct competition with other International financial organizations like ADB, International Monetary Fund (IMF), and the World Bank. In fact, AIIB is not only meant to provide this support to Asian nations but is also aimed to “break the monopoly” of the existing economic order. By providing an alternative, it will drive IMF and World Bank “to function more normatively, democratically, and efficiently, in order to promote the reform of international financial system as well as democratisation of international relations.” In accordance with AIIB’s official agreement to work in “close collaboration with other multilateral and bilateral development institutions,” IMF and WB are supporting the creation of AIIB. While the United States and Japan remain key global actors, they have not yet signed on to its agreement. Evidently, the role of AIIB is not limited to its economic resources, but extends to influence the political world order as well. Reiterating India’s role in the development of AIIB, catapults India into a position of bringing in much needed change in the way finance is provided to the developing world.

Thirdly, India’s support and pairing with China, is certainly a positive direction in the relations between the two countries. Both countries are of the opinion that the Bretton Woods Agreement does not work in favor of the developing world and ignores the growth of countries like China and India. Both Xi and Modi have criticized the gridlocks of Bretton Woods. India and China have already shown significant improvement in their relations with both leaders visiting each other’s countries within the first year of Mr. Modi in office. This new relationship is only strengthened by the close collaboration for the creation of AIIB. This was further evidenced by the visit of Mr. Jin Liqun, President of AIIB, almost a week before the inaugural meeting of Board of Directors on January 18th. This visit just went to show how much China values its growing connectivity with its southern neighbor. However, India must tread carefully through this new tangible relationship with China, as it finds itself in a new position of strength. It must continue to have a friendly relationship with Japan and be confident in its non-involvement in political matters that pertain to China-Japan conflicts. Also, while this relationship is being created, India must continue to foster a healthy relationship with the United States. For the longest time, the US wanted to treat India as a natural ally in order to counter the growth of China. However, India’s opportunistic and regional role by working with China needs to be careful and not in contention with its positive relationship with the United States. The facts that India and China have been in a war and continue to have border issues cannot be ignored, but both Modi and Xi have come to a resolve that “those differences should not be allowed to come in the way of continued development of bilateral relations.”

After the NSA level talks between India and Pakistan were called off earlier in 2015, India-Pakistan relations have been on a roller coaster ride. Pakistan’s Prime Minister, Mr. Nawaz Sharif, and Indian Prime Minister, Mr. Narendra Modi, have met twice since that cancellation. They met at the sidelines of COP21 in Paris and shook hands on what was a closed and “casual” meeting. The NSAs of India and Pakistan, Mr. Ajit Doval and Gen. Naseer Janjua respectively, met in Bangkok early in December of 2015, to discuss issues of terrorism and ceasefire violations, which was followed by the surprise visit by Mr. Modi to Pakistan on Mr. Sharif’s birthday later that same month. However, the terror attack on the Pathankot Air Force Base in India “threatened to destabilize” the follow-up talks. Mr. Sharif immediately called his Indian counterpart and shared his grief and condemned the Pathankot attacks. All these developments, over the course of a month-and-a-half, are not unprecedented. However, what is new and changed is the rhetoric that the Pakistani military establishment is pursuing this time around.

“The Prime Minister also stated that the Pakistani government would investigate this matter. Prime Minister Muhammad Nawaz Sharif pointed out to the Indian Prime Minister that whenever a serious effort for bringing peace between the two countries was underway, terrorists try to derail the process.”

For India, this is completely new diplomatic territory as well, and while only time will tell how these recent development will affect the talks and relations between the two countries, this change is welcome and quite optimistic.

Coming on the heels of Indian Prime Minister Narendra Modi’s surprise visit to Lahore last month, the attack on Pathankot Air Force Station in Indian Punjab by Islamist militants on January 2nd is seen by many as an attempt to derail the nascent peace process between the two countries. This is a serious misunderstanding of this particular attack and such thinking obfuscates adequate appreciation of how Pakistan employs its jihadi assets to prosecute its varied strategic interests in the region. Rather than being a spontaneous response to recent developments, the attack on the Pathankot Air Base is the latest manifestation of a Pakistani national security strategy that addresses its own internal challenges while also pursuing its revisionist agenda against India.

Most of the princely states made their choices prior to partition in August 1947. Three did not. One was the enormous, princely state of Hyderabad which accounted for much of southern India’s land mass, with a Muslim sovereign who governed a Hindu majority. The sovereign opted for independence and staged an increasingly sanguinary rebellion to retain his sinecure. India forcibly annexed it in a police action. The second hold out was Junagarh with a Muslim sovereign and a Hindu majority population. He opted for Pakistan even though the territory was well within India’s borders and even though most of his subjects were Hindu. India forcibly annexed Junagarh as well.

The third holdout was Kashmir. The Hindu sovereign, Hari Singh, presided over a Muslim majority. His territory abutted both Pakistan and India. He wanted independence and even signed a stand-still agreement with Pakistan to preclude it from invading. However, fearing that Kashmir would remain independent or join India, the nascent state of Pakistan dispatched militants to forcibly seize the state. Singh’s own militia forces were unable to stop the advance and sought India’s help. India agreed to defend Kashmir provided that Singh accede to India. Singh signed the instrument of accession and India began air lifting troops in defense of what had become sovereign Indian territory. When this first “Indo-Pak” war ended in 1948, Pakistan controlled about one third of Kashmir while India controlled the rest. Pakistan initiated wars again in 1965 and 1999 to secure more territory but failed to make permanent gains in both cases.

In 1948, the United Nations Security Council passed its 47th resolution calling for a plebiscite to be held to discern the desires of the Kashmiri people. But before any plebiscite can be held, the UN outlined specific conditions that both Pakistan and India were required to fulfill. Pakistan must first evacuate all Pakistani personnel from Kashmir. Conditional upon Pakistan withdrawing its forces, India was required to withdraw the majority of its forces, retaining only a defensive contingent. Only then, upon fulfillment of both of these conditions, the resolution called for a plebiscite to be held under international auspices. Pakistan never demilitarized nonethless Pakistanis, including senior political and military leaders, continue to call for a plebiscite in accordance with the resolution while ignoring the Pakistani actions that were required to enable it.

Pakistan has sustained a low intensity conflict in Kashmir to wrest the territory from India since 1947. Pakistan’s claims to Kashmir are predicated on ideological concerns rather than security concerns. Without Kashmir, Pakistan is incomplete per the jalebi-like logic of the so-called Two Nation Theory. For Pakistan to concede Kashmir and forge an enduring peace with India, Pakistan and its citizenry must evolve their interpretation of the Two Nation Theory. For generations raised on Pakistan’s intertwined narratives of Islam and nationhood, particularly those in the military, this is a price too high to pay. In fact, during a recent visit to Washington D.C., Pakistan’s army chief Raheel Sharif made it clear that “surrendering” Kashmir was something he would never be prepared to do. Since the military exercises de facto control over Pakistan’s foreign policy—not politicians and elected officials such as Prime Ministers—no peace process is currently possible. In fact, if Pakistan wanted peace it could have peace. India has no interest in Pakistani territory as India is a territorially status quo power notwithstanding some Hindu nationalists’ assertion of the bizarre geopolitical notion of an undivided India, known as “Akhand Bharat”.

So why does Pakistan continue with its use of terrorism? It’s remarkably easy to explain. First, it’s inexpensive. Compared to Pakistan’s defense budget of some $7 billion, operating militant groups such Jaish-e-Muhammad (JeM) and Lashkar-e-Taiba (LeT) is mungphalis. Second, it requires no commitment of Pakistani troops to combat. Third, it provides the cover of plausible deniability. Fourth, Pakistan never suffers any material consequences for its jihad habit because of its ever-expanding nuclear arsenal, inclusive of tactical nuclear weapons. These weapons deter India from undertaking military action and ensure that the international community, always afraid of Pakistan failing, stays engaged politically and financially. These are weapons of coercion—or blackmail by another name.

Finally, and most importantly, Pakistan-sponsored terrorist attacks in India immediately prompt international calls for “India and Pakistan” to resolve all outstanding disputes peacefully. This may be the most important outcome yet, given the low cost of this strategy. When the international community imposes this false equivalency over the two states, Pakistan’s version of history is vindicated. Along similar lines, when India reaches out an olive branch to Pakistan and agrees to discuss “outstanding disputes,” India invariably plays into Pakistan’s hands by allowing Pakistan to claim that even India recognizes the legitimate nature of Pakistan’s claims. As long as Pakistan continues to garner these benefits while incurring virtually no costs, these attacks will continue.

An Attack That Was Long in the Making

Following initial reports of the attack, Pakistan’s media, notoriously under intense pressure from the military, immediately went into damage control, mocking their Indian counterparts for jumping to the conclusion that the attackers were from Pakistan. Major news outlets in Pakistan suggested that the attack was an Indian “false flag” operation, a quotidian conspiracy theory that contends that India actually attacks itself to defame Pakistan, Muslims or some other sinister domestic agenda.

Later, the United Jihad Council (UJC), a coalition of Kashmir militant groups with close ties to Pakistan’s military, claimed responsibility for the attack. This too may be an effort to foster the illusion that the attack was about the so-called “Kashmir dispute.”

JeM’s coherence was short-lived: The organization split in late 2001 when its leadership disagreed on whether the organization should stay loyal to the Pakistani state or begin attacking it to punish it for helping to bring down the Taliban regime in Afghanistan. The Taliban shared JeM’s Deobandi ideological orientations and represented the only regime that enforced the version of sharia they all espoused. Many Deobandi militants that Pakistan’s deep state had nurtured were furious that their patrons in uniform had seemingly turned their back on the Afghan Taliban. However, despite the pressure from his confederates to defect, Masooz Azhar remained loyal to the state and reported the developments to the ISI and, as such, he remained a high value asset to the ISI. The new organization launched from the remnants of JeM under the name of Jamaat ul Furqan began a series of deadly suicide attacks and were the fundament for what would emerge as the Tehreek-e-Taliban-e-Pakistan (TTP or Pakistani Taliban).

Revivifying JeM was a cornerstone of Pakistan’s strategy of managing its own internal security challenges. Officials with the United Nations office tasked with monitoring these groups told one of the authors that JeM activists have long been poised for infiltration into India. Thus, the only thing surprising about this JeM attack is that it didn’t happen sooner given the imperatives of recuperating this group as a means of diverting TTP terrorists away from targeting Pakistanis towards targeting Indians. Thus denervating JeM is not only a cornerstone of Pakistan’s foreign policy of nuclear blackmail to achieve ideological objectives in Kashmir, it is a critical part of Pakistan’s internal security strategy to rehabilitate TTP militants. The JeM is Pakistan’s own “ghar vapasi” program for bringing errant terrorists back into the fold.

Pakistan’s Regional Strategy

While most commentators on this attack focus upon the contested disposition of Kashmir this is a narrow vision of Pakistan’s continued strategy of employing Islamist terrorists under its nuclear umbrella as part of a broader national security posture that arches across the countries of South Asia, including Afghanistan, Bangladesh, Sri Lanka as well as throughout India. In fact, it remains a goal of Pakistan-backed militant groups to operate outside of Kashmir. In the wake of the Pathankot attack, Indian intelligence has warned of the possibility that militants are planning to carry out similar attacks targeting Indian air bases in the Eastern part of the country. Attacks on targets in the Eastern part of India would less likely be carried out by infiltrators from Pakistan than Bangladesh, where Pakistan-based militants have been recruiting and organizing for years.

Members of the Pakistani Punjab-based militant organizations such as Lashkar-e-Taiba have been arrested in Bangladesh, and Jamaat-ul-Mujahideen Bangladesh (JMB) has had close ties with JeM, which has operated in Bangladesh for years. In the past year, two Pakistani diplomats were expelled from Bangladesh for allegedly operating as ISI liaisons with jihadi militant groups, and Pakistani militants are regularly arrested in raids on jihadi militant groups in Bangladesh. Pakistan’s militant groups such as LeT and JeM have cultivated based in Bangladesh, Sri Lanka, the Maldives and Nepal in effort to encircle India with bases from which persons can be recruited or launched for operations within India. Ultimately, Pakistan’s Islamists believe that they can coerce Bangladesh into rescinding its independence gained after a hard fought war in 1971. Hafiz Saeed posted on Twitter on the 2013 anniversary of Bangladesh’s liberation that “#WeWillNeverForget #1971 – History has not ended yet, will be rewritten,” and last March told a crowd of supporters that “the implementation of Sharia will make Pakistan a model state attracting even Bangladesh to rejoin Pakistan.”

Pakistan’s interests with regards to India are not exclusive to wresting all of Kashmir; rather, Pakistan has arrogated to itself the retardation of India’s projection of power in South Asia and beyond. As is well-known, Pakistan’s obsession with controlling events in Afghanistan by backing a Islamist militants such as the Taliban are due in considerable measure to Pakistan’s interest in denying India access to Afghanistan and stemming India’s larger ability to compete with it in Central Asia. Pakistan’s ISI continues to encourage groups such as the Jalaluddin Haqqani Network and LeT to attack to Indian assets and personnel in Afghanistan. Pakistan-backed terrorist groups have attacked the Indian embassy in Kabul twice in 2008 and 2009 and several consulates including those in Herat and Kandahar in 2014, Jalalabad in 2013 and most recently in the northern city of Mazar-e-Sharif. In addition to other attacks on Indian personnel working in Afghanistan.

Pakistan’s larger goal of preventing India’s rise requires analysts to stop viewing these groups beyond the buzz word of Kashmir and endeavor to understand the larger context in which they function as a force multiplier in Pakistan’s broader national security strategy. Allowing jihadi militant groups groups to operate semi-autonomously and nominally dedicated to jihad in Kashmir provides the Pakistani state plausible deniability, and masks the militants’ full role in the region.

An Action Plan

In an ideal world, India and the United States-among other interested parties—would be able to cooperate to contain the various threats that Pakistan poses through uses of military, economic, diplomatic and political tools of national power. However, India lacks the offensive capabilities to decisively defeat Pakistan in a short war and has been reticent to invest in the requisite military modernization and personnel policies required to decisively defeat Pakistan. The United States for its part seems unable to find any other policy approach to Pakistan that does not involve handsome emoluments in hopes of securing even marginal cooperation with Pakistan. The sad truth is that both countries are blackmailed by Pakistan’s nuclear weapons program and are loathe to move away from status quo policies.

This does not mean that there is nothing that can be done. One of the simplest things that the United States and its international partners can do is change the way it talks about Pakistan and its terrorist clients attacking India. Americans and Indians who advocate engaging Pakistan at all costs, need to understand that what Pakistan craves is attention to its joint causes of Kashmir and standing up to a hegemonic India. When the international community predictably calls for both sides to settle their outstanding disputes peacefully, they unwittingly reward Pakistan while punishing India by imposing a false equivalency across the two. If the international community instead called for Pakistan to accept the status quo – a reality even Pakistan’s former Army Chief Gen. Musharraf had come to accept, and stop using terrorism and nuclear coercion as tools of foreign policy, Pakistan would be deprived of the benefits its seeks even if it does not incur costs for its behavior. Until the time comes when the international community is prepared to punish Pakistan for transgressing international norms, refusing to reward it is a good place to start.

C. Christine Fair is an associate professor at Georgetown’s Security Studies Program in the Edmund A. Walsh School of Foreign Service. She is the author of Fighting to the End: The Pakistan Army’s Way of War(Oxford University Press 2014). Her twitter handle is @cchristinefair.

Seth Oldmixon is a DC-based political communications consultant who served in rural Bangladesh as a Peace Corp Volunteer. He is the founder of Liberty South Asia, an independent, privately funded campaign dedicated to supporting religious freedom and political pluralism in South Asia. His twitter handle is @setholdmixon.

In September 2008 soon after taking over as Pakistan's civilian President, Asif Ali Zardari, in an interview to an Indian journalist stated that in his view, India was not the biggest threat to Pakistan. On November 26, 2008 Mumbai, India's financial capital, was struck with a series of terror attacks that resulted in 164 deaths and 308 injured.

For decades, as the only American ally in South Asia, Pakistan was able to convince Washington to look the other way when it came to jihad and terrorism in the region. From the 1990s onwards when ties between New Delhi and Washington became closer American administrations started to apply pressure on Pakistan.

The reality however, is that Pakistan is unwilling to change its policy on the use of jihadi groups and their ideology even as it tries to reassure the international community that it is ready for a drastic transformation. All it seeks to do is to speak the right words and use the right body language and implement enough cosmetic changes that will convince the U.S. that Pakistan is serious about giving up its decades old sponsorship of terrorism.

Jaish e Muhammad is one of the two main jihadi groups focused on India that are favored by the Pakistani military, the other being Lashkar e Taiba, that was responsible for the 2008 Mumbai attacks. For now, however, it looks like Lashkar has been asked to lay low primarily because of sustained international pressure on Pakistan to act against Lashkar e Taiba, especially from the United States. This may be the reason why Jaish, which has been inactive for a number of years, now, has been suddenly reactivated in the last few months.

In November 2015, General Raheel Sharif was feted on his second trip to the United States and his words that Pakistan was no longer differentiating between jihadi groups were taken at face value. This time again Washington could either fall for Pakistan's narrative, as it has often done in the past, or accept the reality that Pakistan became its ally only to advance its rivalry with India.

Pakistan's military sees India as the main threat, as always, while seeking American arms on the pretext of fighting communism or terrorism. There has been no change in the narrative of the Pakistani security apparatus. What has grown in the last few years is the size of the security establishment's propaganda machinery. Today the largest wing of Pakistan's intelligence services, the Inter Services Intelligence Division or ISI, is its media wing called ISPR or Inter Services Public Relations. A colonel led at one time ISPR, today it is headed by a Lieutenant General.

Pakistan's military intelligence establishment believes it can still play the games of yesteryears and be a critical player in its region and beyond. And it has built a massive propaganda machine that helps it sustain that belief within Pakistan and use Pakistani media as the echo chamber to propagate the message internationally.

There has been no introspection over the Pakistani national narrative that allows the country to violate all international norms as long as Pakistan can be seen by the world as India's equal. Instead of accepting fresh promises from people who have repeatedly broken each one of the earlier ones, maybe the United States needs to understand that Pakistan's security establishment will continue to use terrorism as long as it believes Washington will keep buying its promises of change.

When Prime Minister of India, Mr. Narendra Modi and his counterpart from Pakistan, Mr. Nawaz Sharif met on the sidelines of the SCO Summit in Russia in July 2015, one of the agendas they agreed upon was that the NSAs of their respective countries would meet in New Delhi “to discuss all issues connected to terrorism.” While the NSAs were all set to meet, India did not see eye-to-eye with Pakistan’s precondition to meet Hurriyat leaders while in New Delhi. After a lot of back and forth, and unwelcome additions to the talks, to discuss the “K-word” (referring to Kashmir) and about LoC violations, they were cancelled or how Ms. Sushma Swaraj put it, “Toh baat-chit nahin hogi”. The possibility of a re-start of dialogue between the two nuclear powers seemed bleak at best.

“If you look at the track record of this government over the past 18 months, their Pakistan policy has been an extravaganza, a somersault, flip-flops and 180-degree U-turns and this [the Bangkok meeting] is absolutely the crowning glory.”

Although these criticisms continue to be played out on national media platforms, the talks between India and Pakistan have officially begun. India and Pakistan continue to undertake this long-sought after process. This could very well fall into the specter of the same trend that has been observed over and over again. Or this shift, to talks that are private, untouched by the media or by external pressures, and off-the-soil of both nations to avoid domestic influences, could become the new template of how India and Pakistan interact to discuss and possibly resolve issues.

The Paris Climate Change summit (COP21) is being hailed as a significant milestone, in a concerted journey to unify over a single cause - to mitigate the challenges that have arisen due to climate change. It is also a milestone to explore new goals, limits and agreements; not only for developing but also developed countries. Only two weeks since the terror attacks in Paris, “leaders of 150 leaders, along with 40,000 delegates from 195 countries” are in Paris for the 21st annual meeting-- Conference of Parties-- of nations under the United Nations Framework for Climate Change. While there have been annual meetings since 1995, UN Secretary General, Ban Ki Moon deems COP21 as a “great opportunity” with conviction that “a political moment like this may not come again.”

While these criticisms are directed at Mr. Obama, there are rallies and protests around the world, and in Paris, criticizing that not enough is being done and urging world leaders to make bolder decisions. At one of the protests in Paris, there are lines of pairs of shoes on the streets with messages like “taking action against climate change and stopping pollution.” This was a unique, and creatively silent protest as mass demonstration are not allowed in the city in light of the November 13 terror Attacks. However, there have been demonstrations where the police has had to use force-- water cannons, batons, and shields -- to disperse the protesters.

“The greatest threat to reaching a binding climate accord may be a loose coalition of developing nations, led by India, who argue that they should not be asked to limit their economic growth as a way of fixing a problem that was largely created by the others.”

Pakistan has denied any wrong doing and committing any war crimes during the civil war of 1971 that resulted in the creation of Bangladesh from erstwhile East Pakistan. This doubling down on denial of an almost universally acknowledged fact came amidst a war of words between Islamabad and Dhaka that began with Pakistan's Foreign Office expressing "deep concern" and anguish" over the "unfortunate executions" of two Bangladeshi politicians accused of torture, rape and genocide during the civil war of 1971. Ali Ahsan Mohammad Mujahid of the Jamaat e Islami and Salahuddin Quader Chowdhury of the Bangladesh National Party (BNP) had been convicted by War Crimes Courts set up by the Bangladesh government.

The legitimacy of the process that resulted in conviction and execution of Pakistani collaborators has been subject of some dispute and controversy but the fact of Pakistani forces terrorizing Bengali civilians is almost undisputed. Pakistan insists on denying war crimes against the people of Bangladesh and has reacted adversely and openly to executions in Bangladesh tied to the 1971 genocide.

This time, too, the Jamaat e Islami has held protest rallies in Lahore against the Bangladeshi decision.

The 1971 civil war resulted not only in the loss of Pakistan's eastern wing, it was also a blow to the country's prestige. Bangladesh was from 1947 to 1971 the more populous but impoverished half of Pakistan. Islamabad has never honestly or seriously examined why the majority of its population chose to secede from the country with the help of India, which is often described by Pakistan's leaders as their country's arch-enemy.

The recent statement by Pakistan's foreign office, however, demonstrates that instead of an acknowledgement of what happened in 1971 there is still an insistence upon refusal to accept historic facts. Pakistan's military, dominated by ethnic Punjabis, supports a national narrative based on denial and false pride. In that narrative Pakistan is always a victim of conspiracies of anti-Islamic forces, never the perpetrator of any wrongdoing. But without acknowledging the blunders of the past, it is difficult that Pakistan will ever be able to move forward.

An inability to reconcile errors and genocide of the past is a sure recipe to making similar blunders in the future. Right now the picture inside Pakistan is not pretty. Every province is facing insurgency or conflict of one kind or another. For Pakistan's Punjabi-led military, putting down ethnic rights movements takes priority over fighting Islamist terrorists it has nurtured for regional influence.

Not only is Pakistan being torn apart by these insurgencies, but its citizens are participating in insurgencies in other parts of the world. Pakistanis have been members of Al Qaeda and prominent leaders of that movement Khalid Shaikh Mohammad and Ramzi Yusuf considered Pakistan their home. That Osama bin Laden was found in a Pakistani garrisons city speaks volumes of the influence of global terrorists in that country.

Under such circumstances, Pakistan should be focusing on its internal challenges. Instead it is increasingly adopting a hyper nationalist stance against India and now Bangladesh. Afghanistan has been unhappy for years with Pakistan's support for the Taliban. Pakistan is becoming increasingly isolated in South Asia because it is insisting on denying facts that its neighbors know to be reality.

According to scholar and former Pakistani Ambassador to the United States, Husain Haqqani, the roots of this lie in Pakistan's desire for parity with India. Pakistani leaders are obsessed with matching, or surpassing, India's stature, prestige and military capability. But Pakistan's denial of harsh realities and insistence on its 'we do no wrong' rhetoric has worsened its ties not only with India but its other neighbors as well.

The policy of encouraging Pakistani citizens to join jihadi militias after being trained by the army dates back to the 1971 civil war. The 'war criminals' currently on trial in Bangladesh were religious fanatics trained to augment Pakistan's military capability against its disaffected Bengali population. Now, Jihadis are expected to help the Pakistan army maintain control on Karachi and Balochistan while helping Pakistan extend its influence in Afghanistan and the Indian state of Jammu and Kashmir.

The insistence on denying that Pakistan committed atrocities during the Bangladesh war of 1971 reflects the refusal of the Pakistani elite to accept the folly of using jihad as an element of state policy. Denials notwithstanding, Pakistan's army attempted genocide in Bangladesh and still failed to hold on to its eastern wing. Instead of benefitting Pakistan, its current Jihadi policy will only radicalize its society further and increase stress along its various faultlines.

“Modi! Modi! Modi!,” cheered almost 60,000 supporters gathered in Wembley Stadium to welcome the Indian Prime Minister, Mr. Narendra Modi, who was on a three-day visit to the United Kingdom. UK Prime Minister, Mr. David Cameron introduced Mr. Modi as the “Chaiwala” who no one expected would lead the “largest democracy in the world.” During Mr. Cameron’s welcome address, Mr. Modi stood a few feet back, sombre and waiting. The audience erupted in cheering and applause when Mr. Cameron reiterated that, for India “Acche din Zaroor Ayenge,” “Great days will definitely come,” but the enthusiasm was more in anticipation for what Mr. Modi had to say to them.

Since becoming Prime Minister in May 2014, UK is the 28th country that Mr. Modi has visited as a concerted effort to continue his active engagement with the world. This is his first visit to the UK, since the country lifted the diplomatic boycott of the leader in 2012. This was only when his popularity was at a peak and his involvement in the Gujarat riots of 2002 had been dismissed multiple times by the Supreme Court of India. Mr. Cameron and his team welcomed Mr. Modi with a red-carpet treatment, that some criticized was meant only for visiting heads of state, which in the case of India would be its President. However, Mr. Modi was escorted and treated like the head of state by Mr. Cameron. Here are six highlights from the trip that attempt to encompass his visit to the United Kingdom.

Economic Optimism

During the three-day visit, Mr. Modi attended multiple events that were business and economy related in pursuing his agenda of economic optimism and rapid growth of the Indian economy. In his meetings he emphasized the significant role that Indian business professionals and their businesses can play in building a more modern India. Mr. Modi attended the Guildhall Business Meeting and in his address enumerated various domestic and trade policy changes that would make India more conducive to do business in including “expedited regulatory clearances including security and environmental clearance.” Earlier this year, Times Magazine reported that prominent Indian businesses were concerned of growing intolerance in India making it harder to do business, and Mr. Modi used all the positive information to convince them otherwise.

Mr. Modi’s address at Wembley was an extravagant affair attended by around 60,000 supporters and cultural performances including dance, music and a display of yoga. Mr. Cameron addressed the crowd first and with his attempt to say a few words in Hindi won the hearts of the audience that erupted in cheers. After his speech, Mr. Cameron embraced Mr. Modi in a hug that was emblematic of a true moment of friendship between the nations. Mr. Cameron, however, was just the opening act for the Indian Prime Minister. Mr. Modi emphasized two different FDI’s that Britain could help India with; one being Foreign Direct Investment and the other, he wittingly exclaimed, being “First Develop India.” The Wembley Stadium arch was lit up in the colors of the Indian flag and the event concluded “featuring the biggest fireworks display in the whole country.”This event was almost three times the size of Mr. Modi’s successful address to the Indian Diaspora at Madison Square Garden in the United States in 2014. This event was, infact, a reiteration of Mr. Modi’s motivation to extend his leadership to the Indian diaspora and a stark reminder that Indian communities around the world have a crucial role to play in the future of India. Parul Malhotra, who attended the event, shared her conviction that Mr. Modi had finally put India on the world map as a significant power to reckon with.”

Mr. Modi’s visit was not without controversy, not just during his visit but even before he landed in the United Kingdom. In light of BJP losing elections in Bihar that was essential for Mr. Modi’s influence in the Rajya Sabha, Upper House of Indian Parliament, as well as the multi-faceted protests against rising intolerance in India, Awaaz Network, organized protests against Mr. Modi. These protests had support from organizations such as “South Asia solidarity Group, Sikh Federation UK, Southall, Black Sisters, Dalit Solidarity Network UK, Indian Muslim Federation, Indian Workers Association as well as the Muslim Parliament and Voice of Dalit International.” The Awaaz network took responsibility for projecting an image onto the House of Parliament of Mr. Modi yielding a sword next to a swastika which on close observation is actually an “Om,” which is from Hinduism. Some harsh critics like Anish Kapur, in the Guardian, have blatantly claimed that India is being run by the “Hindu Taliban.” Other protests involved Director Leslee Udwin wanted to urge the Prime Minister to lift the “absurd and misguided” Indian ban on her movie ‘India’s Daughter.’ The movie, the purpose of which was to bring awareness and an end to gender-based violence in the country, was banned and declared an “an international conspiracy to defame India”. These protests signified that the Indian community in UK is inextricably linked to the events going on in India and play an active voice in the debate. While Mr. Modi continues to invigorate Indian diaspora abroad to play a role in the future of India, he must also recognize these voices might protest against him. However, the surprise came with Mr. Modi being asked about growing intolerance and the country and Mr. Modi finally spoke on the matter that he has been reluctant to break his silence over. The Guardian reported his response that was short yet strict-

“My government will ensure that there is complete freedom of faith and that everyone has the undeniable right to retain or adopt the religion of his or her choice without coercion or undue influence,” Modi said. “My government will not allow any religious group, belonging to the majority or the minority, to incite hatred against others, overtly or covertly,” he added.

Mr. Modi who only a few months ago had called the killing of a man who allegedly ate beef in Dadri an “unfortunate” event, may have just begun to change his rhetoric towards the intolerance in the country.

The issuing of this fatwa by a large group within Islamic leadership did not only urge the international community to take action against this terrorists group, but also encouraged other religious communities to develop a more forthright rhetoric against the acts of ISIL. Dr Anjaria shared, in his documents, a report that suggested mercenaries from ISIL “have been trying to lure Indian youth to join them.” The fatwa, hence, was also issued at a crucial time when ISIL influence in India is starting to be seen as a significant threat.

It is important to understand the influence of the Muslim community in the world, and in India. There are 1.6 billion muslims around the world, making Islam the second largest practiced religion in the world. While the Islam is often more linked to Islam in popular media, the majority of the world's Muslim population actually lives outside the Middle East. This is largely in the Asia-Pacific Region. There are more Muslims living in India and Pakistan than there are in the Middle East. Currently, Muslims comprise of 14.2% of India’s population, which makes the Muslims the largest minority in the country. By 2050, India is estimated to have the largest Muslim population in the world. 311 million Muslims, which is 11 percent of the total muslim population in the world, will reside in India by 2050. Given that there are 1.6 Billion muslims in the world, it is unfair that the religion of Islam is under fire for propagating violence and terrorism. The debate of Islam being a violent religion is also being challenged in popular media with Reza Aslan’s response to “whether Islam promotes violence?.” His response was that “Islam is a religion and like every religion in the world, it depends on what you bring to it, if you are a violent person, your Islam will be violent. Islam is not violent, people are violent.” This rhetoric resonates in the fatwa as well where absolute condemnation by Indian Imams and other Islamic scholars is just another example of protest against ISIL around the world by the Muslim community that is expressing that ISIL is not representative of Islam as it claims to be.

On Aug. 9, New Jersey held its annual India Day Parade. Approximately 38,000 people participated on floats and on foot. Attending the post-parade grand celebration along with a 1,000 guests was an experience. I met TV stars who had been invited from India, local elected officials and community enthusiasts from the tri-state region of New York, New Jersey and Connecticut. Sen. Cory Booker and Arun K. Singh, Indian ambassador to the U.S., took center stage and addressed the crowd together. Booker praised the IDP celebration as "the best of what America represents." Singh lauded the Indian-American community's achievements. The enthusiastic welcome to both dignitaries captured the community's pride in its Indian heritage and its aspirations as Americans. The cordiality between the senator and the ambassador reflected the strength of the U.S.-India relationship today, and the potential role of the diaspora in promoting bilateral trade and enhancing people-to-people ties. More subtly, I believe it established that this diaspora matters to the political calculus -- as voters, election donors and drivers of local economies. Their business decisions can impact both India and the U.S.

This was New Jersey's 11th IDP. New York City will host its 35th annual IDP, the largest outside of India, on Aug. 16. But these celebrations are only the beginning of the "noise" India Day -- and the Indian diaspora -- is making in America.

In the mid-1990s when I first lived in the U.S., celebrations of India's Independence Day were mostly noticeable among larger Indian clusters in New York, Chicago, New Jersey or Texas. Today, communities across America are creating a buzz. Aug. 15, 2015, has been declared as "India Day" in the state of Minnesota. The New York State legislature has declared August as "Indian-American Heritage Month." In the past, gatherings of flag-hoisting events were typically hosted by Indian embassies and consulates worldwide. Today, "India fests" are parallel community-driven celebrations. They are massive, multigenerational, multicultural and public. These renderings reflect economic success, community aspirations and demographic shifts among Indian communities. They also suggest the increased engagement of Indian diaspora communities in bilateral relations.

Twenty-five million people of Indian origin live overseas. Indian diasporas today exude a confidence and energy be it in Britain, Canada, the Middle East, Mauritius or Fiji. The 3 million-strong Indian-American diaspora looms especially large in global business, science and innovation. Although Indian immigration to the U.S. dates back to over a century, the current consolidation of this community emerged after the passage of the Immigration and Naturalization Act of 1965, which abolished the "national origins" quota and facilitated the migration of thousands of Indian engineers, scientists and physicians from India. After the 1980s, the tech boom brought in the next influx of professionals who were young, urban-educated and highly skilled. Satya Nadella of Microsoft and Sundar Pichai of Google are the icons of this generation!

Today, California and New Jersey have the largest Indian communities. Their influence is growing. As I heard Booker lauding the Indian-American community for its "hard work and successes in promoting business in the state of New Jersey," it meshed well with the fact that New Jersey's 300,000 Indians do shape the economic and social landscape of their state. But why should Minnesota declare India Day? And why is this declaration so important?

During recent interviews with Indian-Americans in Minnesota, I discovered some interesting trends and demographic shifts after the 1980s. "When I came in 1989, there were some 300 Indians in Minneapolis; today there are approximately 44,000," Seann Nelipinath, an IT entrepreneur, told me. So, are India Day proclamations a polite nod to "cultural inclusion?" No. It's about demography and economics. There are about 2,200 Indian doctors in Minnesota. Given Minnesota's two giant medical institutions, Mayo Clinic and Medtronic, Indian doctors intersect many segments of health care: clinical, cutting-edge research, innovation, device design, manufacturing and business. At Minnesota's first U.S.-India Healthcare Summit, organized by Nelipinath, I witnessed an entrepreneurial attempt to generate a synergy between health care businesses in Minnesota and India, tapping into Prime Minister Modi's"Make in India" initiative. Such initiatives are attractive to any local administration.

Professor Chari, an economist living in Minnesota for over 30 years, explained the demographic shifts to me: "Minnesota hosts two of America's largest retail brands, Target and Best Buy," he said. "Retail is increasingly becoming IT-intensive and thousands of Indians with H1B visa sponsorships have filled this job sector after the 1980s." According to Chari, the immigrant generation of the 1960s-70s today comprises less than half of the Minnesotan Indian diaspora. Thus, when mid-sized communities are economically strong, they alter the demography of corporations and residential neighborhoods. Their community events acquire a value addition for local governments. This weekend, over 12,000 are expected to gather for the IndiaFest on the Minnesota State Capitol grounds. Although IDPs in America are not new, their exponential growth is making an impact -- socially, politically and spatially.

Indian-origin communities are clearly enjoying their collective visibility and global media attention. The massive crowds that thronged to Madison Square Garden last September to hear Prime Minister Modi created big international media buzz. India Day parades and events like International Yoga Day go one step further. On June 21, 2015 as 35,985 participants performed yoga on Delhi's majestic avenue Rajpath, Forbes contributor Rani Singh called it "a spectacular that might be about more than spiritual growth." Yoga Day had global reverberations. For many, it was a pride-in-heritage moment.

This weekend on Aug. 15, millions of Indians will gather at the historic Red Fort in Delhi to hear Prime Minister Modi's address to the nation. Well after these crowds have dispersed, India Day will pop up in different spots across global time zones as overseas Indians celebrate their national heritage. Diasporic renderings of India Day are emblematic of the confidence and growing aspirational energy of global Indians. Well beyond promoting Indian curry-n-culture, they showcase the collective capital that Indians bring to their adopted homelands.